Rent control?

A group of citizens is trying to qualify a rent control measure for the November ballot in the City of Sacramento (Sacramento Community Stabilization and Fair Rent Charter Amendment). I have mixed feelings. First, some background, then my support, and then my concern.

We absolutely have a crisis of affordable housing in the City of Sacramento. People are becoming homeless due to eviction and a shortage of housing. This is unacceptable in a ‘world class city’ and in any city. We must change things to end this, and in short order.

But understanding the root of the crisis is important. It is really a transportation, housing and land use crisis. The city allowed and encouraged unsustainable suburban development, which it cannot now afford to maintain because the property and sales tax income from suburban development is not and never will be sufficient to maintain the infrastructure there. So the older suburbs have deteriorated as city, individuals, and companies disinvested. The same thing will happen to the newer suburbs, it will just take some time. This would not be as big a problem if we had a transportation system that allowed people to get from their deteriorating neighborhoods to well-paying jobs. But we don’t, and the city and county have refused over the years to fund a high quality transit system, so ours is marginally functional. Why? Because we spent all the money on freeways and arterials, instead of transportation. Our bicycling network and walking network (sidewalks) is sadly lacking outside of the central city.

Single family residences will never be affordable for many people. In fact they can never be affordable to the city or county, but that is a separate issue. We need multi-family housing in order to meet the needs of moderate and low income people. But very little of that is being built.

In the face of these problems, housing of only two types in being built: high to very high cost infill housing in the central city, and moderate to very high cost greenfield sprawl at the far edges, which has even poorer transportation than the suburbs. There is almost no development or redevelopment in the suburbs. In many cases, zoning and NIMBYism prevents redevelopment, but even if it did not, it is not clear that much would be going on there. The people who want to live in the older suburbs are people who largely don’t have other choices. So we don’t have enough housing of the right type and in the right place, and prices go up and up, while availability does not change significantly. I am not a housing expert, and people who are may contradict me on this, but I think the core issue is lack of a range of housing types and costs, and not so much specifically eviction and displacement (I don’t use the G word, as it does not explain anything and does not lead to any solutions). Can we build our way out of the housing crisis? No, but it would be a good start. Will it solve eviction and displacement issues? Only partially.

The Sacramento measure has three components:

  1. Rent regulation: limits the rate of rent increase
  2. Just cause for eviction: Limits the ability of landlords to evict except under certain conditions, and requires relocation assistance if not one of those
  3. Rental housing board: administers the rent control program

I have absolutely no problem with #2. This should be the law no matter what the circumstances, whether we are in a housing crisis or not. Though the apartment association presents a picture of the small landlord renting out a few units, this is the exception. Most rental units, as well as rental houses, are owned by huge out-of-state real estate conglomerates, in fact, in many cases, out-of-country investors. The small landlord picture plays well to people who like to think of themselves as supporting the little guy, and small landlords do deserve some support, but the huge corporations do not. Just cause for eviction is absolutely necessary to balance the power of renters against huge corporations.

I support #1 as a temporary solution, however, the measure does not make it temporary.

Let me be more specific. I think rent control is absolutely necessary to meet the housing crisis that we are in. I don’t buy the arguments of the developers (note that these are largely greenfield developers in Regional Business, not infill developers), the apartment association, or the mayor, that rent control will make things worse. It will not, in fact it can’t get much worse than it already is. There will be problems, but it is not as though we don’t already have problems. There will need to be other solutions, and they should be explored. But we need rent control, and we need it now. It is interesting that the developers and apartment owners have suddenly developed a concern for housing affordability and availability, when they were absent from the conversation before. Bogus! I don’t think the mayor really has a commitment to housing either, he is just trying to stall things as a favor to his contributors. I do not respect these people.

HOWEVER. I think the rent control section should sunset after some period of time, or when some objective is reached. That objective could be a declining rate of increase, below the consumer price index. It could be a vacancy rate above a certain level that is typical of cities outside of California. It could be average rents compared to the median household income. It could be affordable housing as a certain percentage of total housing stock. I’m not sure what the best criteria is, but I am sure there must be a criteria used to sunset. It is worth remembering that Costa Hawkins, the state legislation that severely restricts the ability of cities to manage housing supply and pricing was intended to solve a perceived problem, but here we are 23 years later still suffering from the effects of the legislation. (Some argue that it was never really intended to solve a problem but as payment to contributors, but I don’t know enough to argue one side or the other.) Costa Hawkins should be repealed (by Proposition 10) whether there is rent control in Sacramento or not.

So, I support the efforts of organizations and advocates under the Housing 4 Sacramento coalition to qualify the ballot measure. I think the arguments against it are weak. However, I’m not sure that I will vote for it if it qualifies, because it does not have a sunset. But I’m still learning, and still thinking.